A school district would be penalized an amount that is equal to the amount they used from their state funds to file the lawsuit, the budget says.

State funding makes up a large chunk of revenue for school districts.

"It doesn't say you can't sue the state," said Rep. Tim Kelly, R-Saginaw Township, who chairs the House Education Reform committee and the House Appropriations school-aid subcommittee.

"I don’t think it’s right for schools that are state entities to use state aid dollars - money that could go into the classroom - to sue the state," Kelly said.

But Peter Spadafore, associate executive director of the Michigan Association of School Administrators, questioned the language.

"I don't know how this is constitutional," Spadafore said. "There are ways this can be addressed differently."

It was a source of debate earlier this week in the Senate, with Rep. Robert Kosowski, D-Westland, saying school districts should be able to have their voices heard and recommending the language be sticken from the budget.